Frédéric Court has been a venture capitalist for about 15 years, but it was only recently that he hit the fundraising trail for the first time.
The experience went well, apparently. This morning, Court, a longtime partner with the European venture firm Advent Venture Partners, is taking the wraps off his own, London-based venture fund, Felix Capital, which he says raised $120 million in just a few months.
That might not be terribly uncommon in Silicon Valley, but it doesn’t happen very often in Europe. More unusual, Court is the sole managing partner, though he has enlisted longtime Advent colleague Less Gabb as his finance partner and Antoine Nussenbaum – formerly of Atlas Global – as principal.
Earlier this week, we talked with Court about why he has struck out on his own, and whether his debut fund says anything more broadly about what’s happening in Europe.
Why leave Advent after all these years?
Our last fund is doing extremely well, but Advent is now a life sciences fund [which closed its newest, life sciences fund last fall with $235 million]. It’s a bit like what happened at Atlas Venture. The tech partners were going to raise a tech fund from scratch and I decided instead to start something quite new and have a sector-focused and thematic approach.
Your new theme is “operating at the intersection of technology and creativity.” What does that mean?
It means investing in more creative businesses like digital brands, especially in markets like commerce and media, in sectors like fashion, and beauty and wellness more generally. Some fantastic global brands have been built in Europe, and we think there’s a generation of new companies to be built that are digital first – companies like FarFetch [an e-commerce site featuring designer apparel from hundreds of boutiques], which we backed at Advent and is in our portfolio now at Felix, as well.
Are you looking to fund European companies alone?
They’ll either be in Europe or have a European angle. We have one [still-undisclosed] investment in New York where we’ve been helping them expand across the pond. We did that at Avent with companies like [the mobile payment company] Zong, which we helped move from Switzerland to Palo Alto [where the company was acquired in 2011 by eBay], and [social media marketing company] Vitrue, which is based in Atlanta and we helped expand into Europe.
What size checks will you be writing?
We have the flexibility to invest from $100,000 up to $10 million in a later-stage round, though our sweet spot will be $2 million to $4 million in Series A and B rounds.
You’re announcing three companies as part of the launch. For curious readers, what are they?
There’s FarFetch. We’ve also funded the Business of Fashion, which started pretty much like your newsletter and over the last seven or eight years has become one of the most authoritative media brands in the online fashion industry. Along with [coinvestors] Index Ventures and LVMH, we’re helping the founder turn it into a platform. Our third investment is in Rad, a Paris-based online street wear brand that’s a bit like Urban Outfitters and is expanding across Europe.
This new fund closed with $40 million more than you were targeting. Are LPs loosening their purse strings in Europe more broadly?
There is capital in Europe, but the delta between the opportunity and available capital is significant. It’s still a fraction of the available capital in the U.S.
But you’re also seeing more U.S. firms like Insight Venture Partners enter Europe and take stakes in high-growth companies.
They typically come in much, much later. What we’ve seen in the past two or three years is a reduction in competition from U.S. firms because the market is so competitive in the U.S.; firms just don’t have the bandwidth to fly to Europe unless one of their trusted friends mentions a deal to them. Also, when you’re talking about Insight and [Technology Crossover Ventures] and DST [Global], they’re looking to write checks of $50 million to $70 million, and the number of companies that can take that much capital is much lower here than in the U.S.
Is Europe seeing more corporate investors? They’ve sort of filled a hole in the U.S., especially when it comes to Series B rounds.
We see some corporate money, though much less than in the U.S.. We’re more seeing local sovereign funds step in, where governments have realized that a lack of capital [to startups is a disadvantage]. One of the biggest backers is [the French government’s] Bpifrance.
Are things fairly collegial among traditional early-stage investors then?
There are firms that we know well – Accel, Index – and they were very helpful to me in raising my new fund, and in introducing me to their LPs. In the early stages in Europe, there isn’t the kind of competition you see in the U.S., while in parallel, we’re seeing the quality of talent rise in both founders and people joining startups. These will be very interesting years to invest.
Photo of Less Gabb, Frédéric Court, and Antoine Nussenbaum (left to right), courtesy of Felix Capital.